From: Becker Scott <becker@beckersasc.com>
Subject: Ruling in La. Suit Boost for Out-of-Network Providers; Orthopedic Industry News: Imaging and Device Slowdown; Physician Prescription Info Law Nixed
Reply: becker@beckersasc.com

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January 8, 2008
In This Issue
Ruling in La. Suit Boost for Out-of-Network Providers
Orthopedic Industry News: Imaging and Device Slowdown; Physician Prescription Info Law Nixed
News and Notes
Companies to Watch
Oak Surgery ad
Ruling in La. Suit Boost for Out-of-Network Providers

A recent Federal Appellate Court Ruling from the 5th District regarding a dispute between Blue Cross and some hospitals in Louisiana sets a positive precedent for out-of-network providers and payments. The case started when two hospitals -- who had terminated their Blue Cross contracts due to too-low reimbursements -- filed a complaint with the Louisiana Department of Insurance against the company. In response, Blue Cross sent payment checks directly to patients for services provided by the two hospitals, forcing them to pursue patients for reimbursement -- a difficult task.

Louisiana state law requires insurance companies to send such payments directly to healthcare providers, even out-of-network providers, if the patient signs an "assignment of benefits" form, which nearly all standard hospital and ASC check-in forms include. After the hospitals complained to the state Department of Insurance, Blue Cross filed a federal law suit against the two hospitals, the state of Louisiana and the Louisiana attorney general, asking the federal court to declare that the state law should be pre-empted by the federal ERISA law. ERISA covers many different aspects of health benefits, and Blue Cross believed its application would allow the company to sidestep state law.

However, the federal court ruled that Blue Cross must follow state law and send payments directly to healthcare providers. This is a boost for in-network providers that might feel coerced out of going out-of-network and into accepting too-low payments, and out-of-network providers that might otherwise have a tough time recouping payments directly from patients.

March April issue ad
Orthopedic Industry News: Imaging and Device Slowdown; Physician Prescription Info Law Nixed

Changes in the Imaging and Medical Device Industry. The Wall Street Journal recently noted that each of Phillips, Siemens and General Electric is reporting reduced sales on items such as CT and MRI machines. This slowdown is due in part to reduced reimbursement from the government for non-hospital-site imaging. There is some expectation that this slowdown will last for a long time. Further, there is increased pricing pressure on the private and commercial payor sides. In reviewing this situation, the Wall Street Journal has reported that Phillips plans to change its business strategy to more fully attempt to grow its international business as opposed to staying as highly focused in the United States for CT and imaging business development. GE and Siemens have been less committal about potential changes in strategy.

Physician Information Law Struck Down. A New Hampshire law intended to prevent medical device companies from receiving information about physicians' prescribing practices has been struck down. Briefly stated, certain information firms develop and sell data that shows the prescribing habits of physicians regarding pharmaceuticals and medical devices. This information is often bought by pharmaceutical companies and medical device companies so they can plan the targeting of their marketing. Due to invasion of privacy concerns and due to other concerns that this may allow overly aggressive targeting of marketing efforts, certain states have enacted laws that prohibit the sale of this type of information. These laws are being struck down on first amendment and other Constitutional grounds. A recent law of such type was struck down in both Maine and New Hampshire.

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News and Notes

The year ahead. This is likely to be an interesting year for the ASC business. We expect continued consolidation, some growth opportunities and some real challenges with managed care payors. On the legislative side, the largest challenges are likely to remain for physician owned hospitals and imaging. ASCs are likely to be less impacted.

Question and answer. On hospital ownership of ASCs.

Q: Do you have any information on the average percentage distribution of physician/hospital joint-ventures (e.g. 60 percent physician/40 percent hospital ownership)?

A: There is really a vast range: In general, many hospitals own from 25 to 40 percent; probably a little more than majority require 50.1 percent or more. This is often driven by compliance counsel's perceptions that a hospital must own a majority interest in the joint-venture.

CMS delays some Stark regulations. CMS published a final rule Jan. 3 in the Federal Register that delays until Jan. 1, 2009, certain Stark physician self-referral rules with respect to certain services performed in certain locations. The rule's delay applies to provisions in 414.50, as revised at 72 Fed. Reg. 66222, except with respect to the technical component of a purchased diagnostic test; and (2) any anatomic pathology diagnostic testing services furnished in space that is utilized by a physician group practice as a "centralized building" for purposes of complying with the physician self-referral rules and that doesn't qualify as a "same building."

Titan Health names new chief development officer, hires new VP of business development. Titan Health Corporation announced last week the promotion of Darin Jay (D.J.) Hill to chief development officer. In his expanded role, Mr. Hill will oversee the efforts of the business development team across the country. The company also added Jay Sweetnich as vice president of business development, to its team. Mr. Sweetnich comes to Titan with nearly 20 years of healthcare experience, with expertise in healthcare joint-venture business launches and structuring. Titan Health is a nationwide surgery center development, acquisition and management company that partners with physicians and hospitals to create successful, multi-specialty surgery centers.

Update on June Orthopedic- Pain Management- and Spine-Driven ASC Conference. Besides the May FASA (the ASC Association) annual meeting, and the October FASA/ASC Communications conference, there is not better place to network and meet industry leaders than the June conference. In fact, given the physician and orthopedic focus, many of our exhibitors find this to be the single most effective event of the year.

Last year, this event -- which is focused on orthopedics, and spine and pain -- had more than 480 attendees. Based on the growth we saw last year, we have expanded the roster of speakers and will be bringing in more nationally known figures such as Tucker Carlson and Dr. Brian Cole, as well as Mike Snow from SCA, Cliff Adlerz from Symbion and John Rexwaller from National Surgical Hospitals. We also have a broad and outstanding agenda. Last year, we sold out of exhibit space 30 days before the conference. This year, at a premium cost, we added three spots to the foyer for exhibiting, but exhibit and sponsorship opportunities are limited -- and several exhibit spots are already gone. Please reserve your spot as soon as you can!

The sponsorships include the following:

  • senior leadership,

  • keynote speaker,

  • networking lunch,

  • syllabus,

  • Thursday pre-conference meeting,

  • conference tote bags,

  • cyber cafe,

  • labeled bottled water,

  • continental breakfast,

  • badge lanyards and

  • networking breaks.

Thanks to National Surgical Care, the first company to acquire a sponsorship. National Surgical Care is a rapidly expanding company with terrific leadership; it is sponsoring the conference at a glance that will be distributed to all attendees at the conference. For more information on NSC, e-mail Rick Pence.

Download a conference prospectus here. As always, our full-year ASC Review advertisers receive a discount on exhibiting and sponsorships. For information, e-mail Scott Becker, and he will direct you to your ASC Communications account manager, or call (800) 417-2035, or e-mail Jessica Cole, Emily Noyes or Ryan Kiernan directly.

Thank you, new and returning advertisers. We are delighted to have added Amkai, a leading software development firm, as our newest full-year advertiser. Please e-mail Craig Veach for more information. We are also thankful that so many of our full-year advertisers have returned for another year. We are delighted that Surgery Consultants and Serbin Surgery Center Billing, a leading coding and billing company, have expanded their advertisements to a full-page in the ASC Review.

We also welcome back perennial industry leaders such as John Vick at ASCs Inc., which guides ASCs in joining with corporate partners; new advertiser Roger Manning at Manning Search Group, a leading executive search firm; Jack Amormino at architecture, design, planning and development firm AMB Development; as well as Tom Jacobs and his leadership at MedHQ, which provides payroll and HR services. We also thank Greg Koonsman, Jon O'Sullivan, and and their team at VMG Health, as well as Todd Mello and Curtis Bernstein at HealthCare Appraisers.

We also thank each of Kaye/Bassman and Greg Zoch, who heads up a leading search firm and spends a lot of his time on ASCs and search matters. And we'd also like to thank Surgical Notes, led by Dennis Blankenship and Jeff Blankenship, a leading nationwide provider of medical transcription, coding, and other related value-added information technology services for the ASC market.

Welcome Physicians Capital, which provides loans to physicians based on future earnings from their ownership interests in ASCs. Contact Doug Lewis for more information. We also welcome Access MediQuip, a leading provider of outsourced medical implantable device management solutions to the healthcare industry. For more information, e-mail Bill Cramer.

We also welcome Care Credit, which helps patients finance procedures, and Rob Morris. And thank you to leading medical laundry company Medtegrity Medical Laundary Network. For more information on upgrading your linen supplier, contact David Potack at (888) 546-3650. Thank you.

Looking ahead: March/April issue of Becker's ASC Review. Our March/April issue will focus on several key topics:

  • Establishing an ASC -- A Primer from A to Z;

  • Tips for Profitable Endoscopy in ASCs;

  • Key Products for GI;

  • Hospital-Physician Joint-Ventures: Current Tips for Success; and

  • the Orthopedics and Spine Medical Device Market Letter.

The June conference brochure will also be included. If you would like to contribute, please e-mail Stephanie Wasek or call her at (484) 866-1292.

To ensure you don't miss an issue of the Becker's ASC Review, please subscribe! Visit www.BeckersASC.com or call (800) 417-2035.

Healthcare conference of interest. We are delighted that Outpatient Outlook 2008, an event focused on outpatient care and industry leaders as a whole is advertising with the ASC Review as well. This is not an ASC Communications event, but is presented by a5, a Chicago-based firm with significant healthcare and event marketing experience. For more information, e-mail John Harris or visit Outpatient Outlook online.

June conf ad w Emily
Companies to Watch

We are delighted to highlight the following companies in this week's E-Weekly.

Practice Partners. Practice Partners in Healthcare takes great pride in the development, management and equity ownership with its physician and hospital partners. Practice Partners is a privately held, Birmingham, Ala.-based company recently capitalized by HealthCor Partners. Specializing in de novo and turn-around situations, Practice Partners' physician base encompasses a wide array of surgeons with an emphasis in orthopedics. The company model is physician-centric and focused on hands-on management and diverse resources to assure the finest clinical and fiscal outcomes. Employees are experienced and understand the need for expedience in all aspects of the industry. Let Practice Partners in Healthcare assist you in your next surgical center opportunity. E-mail Larry Taylor or visit Practice Partners online.

Physicians Endoscopy. Physicians Endoscopy develops and manages endoscopic ambulatory surgery centers in partnership with practicing GI physicians and hospitals. We currently partner with 150+ physicians in Arizona, California, Florida, Indiana, Michigan, North Carolina, New Jersey, Ohio, Pennsylvania, Texas and Washington. The company's physician and hospital partners enjoy majority equity ownership and maintain all facets of local control, while PE holds a minority ownership position. It's 14 operating centers provide services to 125,000+ patients annually. The company has five additional centers under development. The strategy is simple: service. Physicians Endoscopy is forthright, reliable, and communicative, and we deliver upon expectations and promises. Additionally, its centers regularly deliver a greater-than-50 percent profit margin. Visit them on the Web at www.endocenters.com", or e-mail John Poisson or call him at (215) 589-9003.

QSE Technologies. QSE Technologies is a premiere IT systems integrator serving the ambulatory healthcare industry for more than five years. QSE manages all aspects of IT infrastructure design, configuration, installation and ongoing tech support for new and existing ASCs nationwide, including computer servers, data storage and backup systems, local and wide area networking (including secure WiFi), firewalls, broadband internet access, data cabling, security software, workstations and laptops (including tablets and slates), secure remote access and HIPAA Security compliance. QSE works closely at the earliest conceptual stages with ASC management and development companies, architects, physician owner groups and hospitals to design and implement technology infrastructure systems that support both today's and tomorrow's healthcare information technology needs. For more information contact QSE's co-founder and CEO, Marion K. Jenkins, PhD, at (877) 236-0795, or via e-mail, or visit QSE's Web site.

ZChart. It's incredible that surgical records are still kept the same way they were almost 100 years ago when you consider paper charts are messy, wasteful, expensive and leave room for error or misinterpretation. Further, creating and filing paper charts is time-consuming and paper storage is inefficient. This robs resources from patient care. ZChart's EMR was developed by dozens of healthcare professionals - administrators, office staff, nurses and physicians - at multi-specialthy outpatient surgery centers. Years of development and everyday use in the real-world surgery center environment has created a first-rate, intelligent, 21st century surgical chart that will surprise and delight users. They have a system designed exclusively for ASCs. Contact Tom Felstad at 866-924-2787. For more information visit www.zchart.com.

 
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If you have any questions on any of the items listed in this letter, please contact me at (312) 750-6016 or by email at sbecker@mcguirewoods.com.

 
IF YOU'D LIKE TO BE ADDED TO OUR E-WEEKLY UPDATE FROM BECKER'S ASC REVIEW, PLEASE E-MAIL MYSELF AT SBECKER@MCGUIREWOODS.COM OR GO TO WWW.BECKERSASC.COM.
 
Very truly yours,
Signature
Scott Becker
SB/kjd


Scott Becker, JD, CPA
sbecker@mcguirewoods.com
(312) 750-6016

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